Question

9.
Minority of the subsidiary company is entitled to
(A) Capital profits
(B) Revenue profits
(©) Both capital and revenue profits
(D) None of the above​

Answer 1

Answer:

c

Explanation:

both capital and revenue

Answer 2

CAPITAL PROFITS

Minority of the subsidiary company is entitled to (A) capital profits.

GETTING TO KNOW MORE ABOUT CAPITAL PROFITS:

* Capital profit is the profit produced by a company through the sale of its assets, shares, and debentures. When assets are sold for more than their book values, the difference is called capital profit.

* Similarly, if shares and debentures are sold for more than their face value, the difference between the face value and the premium is capital profit. Profits like these aren't made in the usual course of business. It is not accessible for distribution as a dividend to shareholders.

Profits are deposited in a capital reserve account. It's used to compensate for capital losses. It's on the liabilities section of the balance sheet.